Does consolidating student loans affect credit score
)It seems like a roundabout way to go about paying your debt: I mean, you are taking out a new loan to pay off another loan. The reality is that, if you are currently having trouble keeping up with payments or digging yourself out of debt quicker, a debt consolidation loan may be just the solution for you. Student loan consolidation is the process of combining your Federal student loans into one single loan.Furthermore, there are other potential benefits to taking out a consolidation loan as well (such as being able to take advantage of student loan forgiveness programs). For example, you might have 3 or 4 different student loans by the time you graduate college (one for every year you went to school).Additionally you need to be current on your payments.If your loan payments are in default, you will be required to make at least 3 consecutive monthly payments before you can apply for the Federal student loan debt consolidation loan.For an explanation of our Advertising Policy, visit this page.Getting rid of student debt is high on the radars of everyone who has it.
Note: This doesn't apply to Spousal consolidation loans.Here’s an example: If your payments currently come to a total of 0 across multiple accounts and you apply for a debt consolidation loan, that payment could come down to say 0.Now you are paying just one payment of 0 per month (plus any applicable tax) instead of twice the amount like you were paying before.Student Loan Refinancing: This involves getting a private loan to replace some (or all) of your existing student loans.You can consolidate Federal loans, but you cannot consolidate private loans.
This could also mean you won't qualify for student loan forgiveness programs such as PSLF. Consolidating your student loans could end up costing you more over the life of the loan if you forget a couple of things.